Sensex Slumps to a seven-month Low

Indian stocks fell for a third day, dragging the benchmark index to a seven-month low, amid concern policymakers will take more steps to curb inflation.

State Bank of India, the nation's biggest lender, dropped 3.64%, the most in a month. Bharti Airtel Ltd, the largest cell phone operator, lost 2.8% after say- ing a regulatory proposal to increase the price of mobile spectrum discriminates against older operators. Stocks fell as Reserve Bank of India deputy governor Subir Gokarn said on Wednesday that food prices are a great concern. Reliance Infrastructure Ltd jumped 9.8% following its biggest drop in more than two years on Wednesday.

The Bombay Stock Exchange's Sensitive Index, or Sensex, lost 129.73, or 0.74%, to 17,463.04 at the close of trading in Mumbai. The gauge closed at the lowest level since 5 July.

The Sensex is the worlds worst per- former this year after Egypt and has lost 17% from a 5 November record. A slump of 20% signifies a bear market to some investors.

“The bears seem to be having a grip on the market”, R.K. Gupta, managing director of Taurus Asset Management Ltd, said by phone from New Delhi.
Good results from Indian Oil Corp. Ltd did bring some relief for investors.

The 30-stock Sensex rallied briefly, rising as much as 0.3%, after Indian Oil's third-quarter profit beat analyst estimates. Companies on the Sensex are valued at an average 16.5 times esti- mated earnings, down from last year's high of about 21.5 times in March, ac- cording to data compiled by Bloomberg. The S&P CNX Nifty Index on the National Stock Exchange decreased 0.53% to 5,225.80. The BSE 200 Index retreated 0.34% to 2,142.43. BLOOMBERG